(a) Policy. It is the policy of the Department of Defense that contractors provide and retain title to special tooling required for the performance of defense contracts to the maximum extent consistent with sound procurement objectives. Government acquisition of title or the right to title in special tooling creates substantial administrative burden, encumbers the competitive procurement process and frequently results in the retention of special tooling without advantage commensurate with such burden. In certain instances, however, the acquisition of special tooling or rights thereto may help the Government obtain fair prices, recover the residual value of special tooling paid for by the Government, and increase competition in subsequent procurements by increasing the number of sources, where the tooling is susceptible of use by more than one contractor, considering its adaptability and all costs of movement. Additionally, the Government may require all or a substantial part of the tooling for subsequent in-house use. The particular circumstances of each procurement must be considered in determining whether the advantages of acquiring special tooling or rights thereto outweigh the disadvantages.

(b) Application of policy in competitive and noncompetitive procurements. In procurements where there is adequate price competition, the Government usually relies on the competition to obtain a fair charge for the amortization of special tooling provided by the contractor. Furthermore, in a competitive area, ownership of special tooling by one contractor is not likely to prevent others from competing in follow-on procurements. Thus, it is not generally appropriate for the Government to acquire special tooling or rights thereto in competitive procurements. However, where there is not adequate price competition, the Government typically pays the full cost of the special tooling regardless of who owns or has rights to it, and therefore it is usually appropriate for the Government to acquire special tooling or rights thereto. Moreover, Government ownership may make it easier to create competition in follow-on procurements. Where a decision is made not to take title to special tooling in a procurement

without price competition, consideration shall be given to the need for special contract provisions covering contractor plans for future recovery of any initial special tooling costs in follow-on noncompetitive procurements (see § 3.813 of this chapter).

§ 13.305-2 Fixed-price contracts.

(a) General. In fixed-price contracts where a certificate of current cost or pricing data is not required, special tooling or rights thereto shall not be acquired unless the contracting officer determines such acquisition to be advantageous to the Government, considering the factors set forth in paragraph (b) of this section.

(b) Criteria for acquisition. In deciding whether to acquire special tooling or rights thereto, or to exercise the Government's acquisition rights under contracts or subcontracts pursuant to the Special Tooling clause set forth in § 7.104-25, the following factors shall be considered:

(1) The current or probable future need of the Government for the items involved and the estimated cost of reproducing them if not acquired;

(2) Their estimated residual value; (3) The administrative and other expense incident to reporting, recordkeeping, preparation, handling, transportation, and storage;

(4) The effect on pricing future contracts;

(5) The feasibility and probable cost of making the items available to other bidders or offerors in the event of future procurement;

(6) The amount offered by the contractor for the right to retain the items; and

(7) The contribution Government acquisition makes to future competition.

(c) Criteria for waiving special tooling provisions in subcontracts. In determining whether rights to acquire special tooling from subcontractors are not of substantial interest to the Government so as to permit the omission of special tooling provisions from the affected subcontracts pursuant to paragraph (j) of the Special Tooling clause set forth in § 7.104-25 of this chapter, the contracting officer shall consider the factors listed in paragraph (b) of this section. It is desirable that such determination be made before execution of the contract, to the extent practicable, in which case the

price shall reflect the authorized omission of special tooling provisions in any affected subcontract. If this question is presented to the contracting officer after execution of the contract, he shall condition his determination upon securing the contractor's consent to an equitable reduction in the contract price to reflect any reduction in the price of the affected subcontracts resulting from the omission of such provisions.

(d) Procedures (1) If the contracting officer has decided not to acquire special tooling or rights thereto, he may include in the solicitation such information as he may have of current planning for future procurements of the item involved, consistent with security requirements. Offerors shall be advised in the solicitation that such statements are estimates and there is no assurance that any quantity will be procured.

(2) In formally advertised procurements, each item of special tooling to be acquired by the Government under the standards set forth above shall be clearly identified in the invitation for bids as a separate item, or by category if individual items are low in value, and the Special Tooling clause in § 7.104-25 of this chapter shall not be used.

(3) In negotiated procurements, each item of special tooling to be acquired under the standards set forth above shall be identified as a separate item in the solicitation and contract to the maximum extent practicable, or by category if individual items are low in value. If such identification is impracticable, title to special tooling may be obtained through use of the Special Tooling clause in § 7.104-25 of this chapter. If the use of this clause will result in an undesirable acquisition of rights to some special tooling, the Schedule shall specify the special tooling not covered by the clause.

(e) Protecting Government interest in contractor-owned special tooling. Where the Government does not acquire special tooling or the rights thereto pursuant to paragraph (d) of this section, but will pay for a substantial portion of the special tooling in the price paid for supplies or services, special provisions may be included in the Schedule of a contract to give recognition to the equitable interest of the Government in the special tooling, if such interest is significant. For example:

(1) Where there is a distinct possibility that the Government eventually may decide to acquire title to the special

tooling, the contract may provide for an option in the Government to acquire the special tooling at a specified price or for an amount to be determined in accordance with specified standards (the criteria set forth in paragraph (b) of this section shall be considered in exercising such options); or

(2) If the Government does not acquire or reserve the right to acquire title to the special tooling, the contract may provide for the contractor's future amortization of the special tooling under Government contracts.

[30 F.R. 1744, Feb. 9, 1965, as amended at 30 F.R. 14093, Nov. 9, 1965; 36 F.R. 7950, Apr. 28, 1971]

§ 13.306-1 Furnishing existing special test equipment.

It is the policy of the Department of Defense to offer existing Governmentowned special test equipment to contractors when advantageous to the Government in the light of the factors set forth in § 13.304. Government-owned components to be incorporated into special test equipment may also be offered in accordance with this policy. These components may be facilities, special test equipment, or cannibalized components of other special test equipment for which there is no further need. § 13.306-2 Acquisition of new special test equipment.

New special test equipment may be acquired by a contractor for the Government when:

(a) Advantageous to the Government in the light of the criteria set forth in § 13.305-2(b) for special tooling in fixedprice contract, and

(b) Existing Government-owned special test equipment or components thereof cannot be made available. § 13.306-3 Contract provisions for acquiring special test equipment.

(a) In formally advertised procurements, each item of special test equip

ment to be acquired by the Government shall be clearly identified in the invitation for bids as a separate item, or by category if individual items are low in value.

(b) In negotiated procurements, with respect to special test equipment the exact nature of which is known when the contract is signed, the contract shall identify each item of special test equipment to be acquired by the Government as a separate item or by category if individual items are low in value.

(c) In negotiated procurements, with respect to special test equipment the exact nature of which is not known when the contract is signed, the contract shall define the extent to which the contractor will be responsible for acquiring special test equipment for the Government. In such cases, the clause set forth in § 7.10426 of this chapter shall be used to permit the Government to furnish special test equipment in kind and thereby obtain an equitable adjustment.

[30 F.R. 1744, Feb. 9, 1965, as amended at 36 F.R. 7950, Apr. 28, 1971]

§ 13.306-4 Screening existing Government-owned special test equipment.

To minimize the acquisition of new special test equipment or components thereof, the contracting officer shall, if the acquisition cost of any item or component is $1,000 or more, screen existing Government production and research property to ascertain whether any Government-owned property can be furnished in accordance with the policy set forth in § 13.306-1. To accomplish such screening for any property listed in § 13.312, DOD Industrial Plant Equipment Requisition (DD Form 1419) shall be submitted to the Defense Industrial Plant Equipment Center, Memphis, Tenn. 38102. When special test equipment is to be acquired in the manner described in § 13.306-3(b), the screening shall be accomplished before contract award. When special test equipment is to be acquired in the manner described in § 13.306–3(c), the contracting officer shall normally accomplish the screening and notify the contractor of the Government's election within the notice period provided in the Special Test Equipment clause in § 7.10426 of this chapter. Thereafter, the Government-owned items to be furnished shall be promptly shipped to the contractor and the contract shall be equitably adjusted pursuant to the Special Test Equipment clause. However, if the

contracting officer determines that the savings anticipated from furnishing Government-owned items would be exceeded by costs that might be incurred as a result of delays or administrative actions, he may, except as to items listed in § 13.312, waive the screening and shall immediately advise the contractor that the Government will not furnish the equipment. For items listed in § 13.312, when warranted by the urgency of the situation, requests for screening may be submitted to the Defense Industrial Plant Equipment Center by whatever means deemed expedient. When submitting urgent screening requirements other than on a DD Form 1419, the following elements of information must be furnished for each item of equipment: (a) Case number;

(b) PEC/SCC/FSN;

(c) Description data sufficient to enable DIPEC to make an urgency determination of availability;

(d) Date item required;

(e) Name and address of requiring agency;

(f) Contract, appendix, item number and program;

(g) Statement as to whether item is for production or mobilization, replacement or modernization, whether item will be procured if not available from DIPEC, and the date of availability from procurement; and

(h) Assigned urgency rating.

Upon notification of availability by DIPEC, a DD Form 1419 will be submitted to DIPEC for each item accepted by the requestor. However, if DIPEC does not have the item available, or cannot furnish the item within the time specified by the requestor, DIPEC will furnish a statement of nonavailability including a certificate number. This statement will be the official Certificate of Non-Availability and will confirm that the plant equipment item has been screened against the idle inventory. [30 F.R. 12009, Sept. 21, 1965, as amended at 36 F.R. 7950, Apr. 28, 1971]

§ 13.307 Providing Government produc. tion and research property when disposal is limited.

(a) Nonseverable property. Government production and research property, other than foundations and similar improvements necessary for the installation of special tooling, special test equipment, and plant equipment (see § 30.2 of this chapter, item 103.8), shall not be

installed or constructed on land not owned by the Government in such fashion as to be nonseverable, unless the head of a procuring activity determines that such location is necessary, and:

(1) The contract under which such property is provided contains a provision for reimbursing the Government for the fair value of the property at the completion or termination of the contract or within a reasonable time thereafter (for example, in appropriate cases, such a provision may require the contractor to purchase the property at a value to be determined by appraisal, or at a price equal to its acquisition cost less depreciation at a specified rate considering its estimated useful life, or may require the contractor to reimburse the Government for its scrap or salvage value if the head of a procuring activity determines that its estimated useful life will not extend beyond the expiration of the facilities contract or the completion of the work for which the property was provided);

(2) The Government has an option to acquire the underlying land; or

(3) The contract under which such property is provided contains an alternate provision that the Secretary considers to be adequate to protect the interests of the Government therein (the authority of the Secretary under this subparagraph may not be delegated).

(b) Property subject to patent or other proprietary rights. If patent or other proprietary rights of a contractor may restrict the disposal of Government production and research property, the condition in either paragraph (a) (1) or (3) of this section shall be satisfied before such property is provided.

§ 13.308 Offer to furnish Government production and research property "as is".

(a) Government production and research property may be offered on an "as is" basis in any solicitation for fixedprice type contracts, whether such property is in storage or in the possession of a contractor. In the latter event, the offer will be subject to the policy stated in § 13.304 (a)(1) regarding the relative priorities of the work involved.

(b) Government production and research property may be offered on an "as is" basis for the performance of fixedprice type contracts only if it can be inspected by bidders or proposers prior to the submission of their offers. In such cases, the solicitation shall include the

clause set forth in § 7.104-24(e) of this chapter and shall state:

(1) The availability and location of the property, and the conditions under which it may be inspected;

(2) That the property will be offered in its current condition, f.o.b. present location;

(3) That bidders or proposers must satisfy themselves that the property is suitable for their use;

(4) That any costs of transporting, installing, modifying, repairing, or otherwise making the property suitable for use shall be borne by the successful bidder or proposer;

(5) That evaluations will be made to eliminate any competitive advantage from the use of the property (see Subpart E of this part); and

(6) The bidders or proposers to whom the property is offered, if it is not to be offered to all.

(c) If, in accordance with the policy stated in §§ 13.402 and 13.403, the successful bidder or proposer is authorized to use property furnished on an "as is" basis, the Government shall furnish the property in its current condition, f.o.b. present location. If a facilities contract is used to furnish Government production and research property offered on an "as is" basis, the Schedule shall state that the contractor shall not be reimbursed thereunder for transporting, installing, modifying, repairing, or otherwise making the property ready for use. [30 F.R. 1744, Feb. 9, 1965, as amended at 36 F.R. 7950, Apr. 28, 1971]

§ 13.309

Changing Government production and research property to be provided.

The amount of Government production and research property specified under a contract to be provided may be increased by a bilateral modification of the contract. Such increases shall be made only when approved in accordance with the policies prescribed in this subpart and when the Government receives adequate consideration therefor. Unilateral decreases in or substitutions for the Government production and research property specified under a contract to be provided by the Government may be ordered by the contracting officer, subject to the equitable adjustment of the contract, in accordance with paragraph (b) of the appropriate Government Property clause in Subpart G of this part.

§ 13.310

Limited offers.

If it is not feasible to make Government production and research property available to all bidders or proposers, solicitations offering to furnish such property under this subpart may limit the offer accordingly.

§ 13.312 Items to be reported to and screened by Defense Industrial Plant Equipment Center (DIPEC).

The items to be reported to and screened by the Defense Industrial Plant Equipment Center in accordance with §§ 13.301(g) and 13.306-4 are listed in the following Joint DoD Handbooks.